The City Council tightened the home-sharing ordinance after discovering that a five-bedroom home, pictured, was listed for up to 36 guests. (Airbnb)

Airbnb will remove listings that violate the city of Santa Monica’s home-sharing law under a settlement it reached with the city Tuesday.

The settlement requires all listings to display a city license number, which are provided to hosts who register with the city and obtain a business permit and license. Starting Jan. 20, Airbnb will only allow each host to list one home and no more than two listings per residence. Airbnb will also pay the city $2 per night for each listing in Santa Monica to support the development of affordable housing.

The settlement marks the end of a three-year legal dispute between Airbnb and the city. In September 2016, Airbnb and Homeaway challenged the city’s recently adopted home-sharing ordinance, which allows residents to rent out their homes for up to a month as long as they remain on the premises. 

“When Santa Monica adopted its home-sharing ordinance, it struck a balance,” said City Attorney Lane Dilg. “There were concerns that vacation rentals could decrease our housing supply in the midst of a housing crisis. The City Council adopted an ordinance that allows community members to supplement their incomes by legally inviting residents into their homes.”

A federal appeals court rejected the challenge to the ordinance in March and the City Council tightened the ordinance in September after it became aware that some hosts were operating de facto hostels in single-family homes. The new rules prohibit hosts from accepting more than two bookings at a time and from acting as the host for more than one listing.

Dilg said the settlement will ensure those rules are enforced. 

“The win for us is the ability to regulate the platform’s conduct,” she said. “Going after the hosts is very inefficient when the company is still allowing them to post listings. Now, when we provide Airbnb with notice that a listing violates the ordinance, they will take down that listing for us.”

She added that the court decision and the settlement give the city the ability to enforce the rules on other home-sharing platforms or negotiate similar settlements.

Councilmember Kevin McKeown said the settlement will help preserve the city’s limited housing stock.

“We now can better protect real permanent homes, especially our affordable rent-controlled apartments, from being used as de facto hotel rooms, displacing our neighbors,” McKeown said.

The city and Airbnb entered into the settlement while the company’s appeal of the March court ruling was pending. The parties agreed to temporarily stay the appeal and negotiate the settlement.

“After years of uncertainty for our host community in Santa Monica, the new settlement agreement provides our hosts the clarity they need to continue sharing their homes,” said Matt Middlebrook, Airbnb’s California head of public policy. “We are proud to support Santa Monica’s efforts to build and maintain affordable housing and look forward to continuing to work with city leaders on policies that strengthen the communities our hosts call home, just as we’ve done in jurisdictions around the world.”

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